Goldilocks Is the Bookkeeper for Three Bears Company

question 107

Multiple Choice

Goldilocks is the bookkeeper for Three Bears Company.She prepared the company's bank reconciliation at the end of the year and found only two reconciling items: deposits in transit of $2,850 and outstanding checks of $3,500.She then made an adjusting entry to decrease the company's cash balance for the deposits in transit and increase the company's cash balance for the outstanding checks.Now the company's cash balance is exactly the same as the bank statement balance.As a result of the adjusting entry,the cash shown on Three Bears Company's year-end balance sheet will be ________.

• A)too high
• B)too low
• C)just right
• D)The answer cannot be determined from the information given.

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Definitions:

Legally Responsible

The obligation to answer for an act or omission in a legal or regulatory context, potentially leading to civil or criminal penalties.

Trade Dress

The visual appearance of a product or its packaging that signifies the source of the product to consumers.

Visual Appearance

Refers to the way objects are perceived in terms of their aesthetic aspects, including color, shape, and size.

Cryptocurrency

A digital or virtual currency that uses cryptography for security and operates independently of a central bank.